FirstGroup rail results hit

TRANSPORT giant First Group, which carries more than 20 million passengers a year on trans-Pennine routes, today said annual profits at its rail division fell 21 per cent due to the impact of the recession on its franchises serving London. The group said the UK's economic woes meant rail revenues growth slowed to 9.5 per cent in the year and profits slipped to £94.2m from £120m a year earlier.

TRANSPORT giant First Group, which carries more than 20 million passengers a year on trans-Pennine routes, today said annual profits at its rail division fell 21 per cent due to the impact of the recession on its franchises serving London.

The group, which is the UK's largest rail operator, with a portfolio including First Great Western, First ScotRail and First Capital Connect, said the UK's economic woes meant rail revenues growth slowed to 9.5 per cent in the year and profits slipped to £94.2m from £120m a year earlier.

The performance of its Manchester-based First TransPennine Express operations, which is led by managing director Vernon Barker, dipped towards the end of 2008, with delays due to lineside cable thefts, infrastructure failures in poor weather and unexpectedly high levels of driver sickness.

FirstGroup said it was working with Network Rail to identify problem areas and to improve punctuality and reliability. It is also working with the Department for Transport on the introduction of additional carriages across the Trans Pennine Express network.

However, the Aberdeen-based company said the impact of the recession was mitigated by revenue support schemes from the department.

Across the whole group, pre-tax profits rose 31 per cent to £326.4m in the year to March 31.

In the UK bus arm, with a fleet of 9,000 and a market share of 23 per cent, revenues increased by seven per cent and operating profits lifted 9.8 per cent to £134m.

The North American business, which operates 60,000 yellow school buses and the Greyhound intercity coach service, generated revenues of £2.87bn and saw profits increase 72.5 per cent to £294.6m at constant currency rates.

Greyhound has taken steps to reduce operating costs, including through a programme to lower headcount by 1,100.

Chief executive Sir Moir Lockhead said: "While it is still early in the new financial year, overall the group has continued to trade well and broadly in line with our expectations."